3. CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, digital assets held with third-party custodians, and accounts receivable. The Company evaluates concentrations on an ongoing basis and mitigates exposure through the use of established financial institutions and digital asset custodians, diversification of counterparties where practicable, and ongoing monitoring of customer creditworthiness. The Company has not experienced any losses on deposits or digital asset holdings during the periods presented.

Cash and Cash Equivalents. The Company maintains its cash balances with multiple U.S. financial institutions. Balances held with these institutions may, from time to time, exceed federally insured limits. As of June 30, 2026 and December 31, 2025, the majority of the Company’s cash balances exceeded federally insured limits.

Digital Asset Custodians. The Company’s digital assets are held with a limited number of institutional-grade third-party custodians. Balances held with digital asset custodians are not federally insured. The Company manages custodial risk through the use of multiple counterparties, ongoing evaluation of each custodian’s financial stability, and review of their security and safekeeping practices. From time to time, a significant portion of the Company’s digital assets may be concentrated with a single custodian. As of June 30, 2026, digital assets were held with the following custodians:

SCHEDULE OF CONCENTRATION OF CREDIT RISK CONSISTS OF DIGITAL ASSETS HELD WITH CUSTODIANS

The Company maintains a custody relationship with FalconX, although no digital assets were held with FalconX as of June 30, 2026.

Digital Asset Composition. The Company’s digital asset holdings are concentrated in a limited number of crypto assets. As of June 30, 2026, approximately $115.1 million, or 50.5% of the Company’s total digital asset holdings of $228.0 million, consisted of Worldcoin (WLD). The Company’s remaining digital asset holdings consisted primarily of Ethereum (ETH) and U.S. dollar-denominated stablecoins (USDC and USDT). A significant decline in the market price of WLD would have a material adverse effect on the fair value of the Company’s digital asset portfolio and could result in significant unrealized losses recognized in net income in subsequent periods. See Note 6 — Digital Assets for further discussion.

Accounts Receivable. The Company performs ongoing evaluations of customer creditworthiness and does not require collateral. As of June 30, 2026, one customer represented approximately 100% of total accounts receivable. The Company maintains an allowance for expected credit losses based on historical experience and forward-looking information. See Note 7 — Accounts Receivable for further discussion of a significant deterioration in the creditworthiness of the Company’s largest customer during the six months ended June 30, 2026 and the resulting increase in the allowance for expected credit losses.

Revenues and Geographic Concentration. For the three and six months ended June 30, 2026 and 2025, one customer represented approximately 99% and 83% of total revenues, respectively. For the three and six months ended June 30, 2026, approximately 99% of consolidated revenues were derived from customers located in Europe and denominated primarily in Euros. Fluctuations in the EUR or GBP relative to the USD may materially impact reported revenues and results of operations.